Singtel's underlying profit falls 21% in 1H19

09 Nov 2018

Singtel has reported a 21% year-on-year slump in underlying net profit for the first half of its financial year, largely as a result of forex losses and lower contributions from the group's regional mobile associates.

Net profit fell 60% to S$1.5 billion, but this was mostly due to a one-time gain from the partial divestment of NetLink Trust for S$1.88 billion.

Singtel established NetLink Trust to build, own and operate the fiber infrastructure for Singapore's Next Generation Nationwide Broadband Network (NG-NBN).

As a condition for securing the NG-NBN contract, Singtel was required to agree to bring its stake in the company below 25% by April this year.

Excluding the impact of the divestment, underlying profit for the half-year period fell 21%. Singtel blamed the result on the stronger Singapore dollar against the Australian dollar, which impacted earnings from the company's wholly-owned Australian subsidiary Optus.

A weaker performance by India's Bharti Airtel and Indonesia's Telkomsel, two of the Singtel Group's mobile associates, also contributed.

Operating revenue for the quarter stayed flat at S$8.42 billion, but grew 3% in constant currency terms.

For the September quarter, Australia consumer revenue grew 8% due in part to growth in postpaid mobile customers and higher equipment sales, while Singapore consumer revenue grew 5%, with mobile revenue up 7%.

Singtel added 87,000 postpaid mobile customers in Australia and 41,000 in Singapore during the quarter.

But group enterprise revenue fell 4%, partly as a result of price erosion in carriage services, and Singtel's share of pre-tax earnings from its regional associates fell 51% to S303 million. For the half-year, Singtel's share of these earnings declined 46% to S$694 million.

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